I honestly don't know what (if anything) is done during the current non-commissioned SQ or officer CAP with regard to the harsh realities of "fist-to-face". I suspect that there is none, and more's the pity. "Milliing" (with appropriate protective gear), Pugil fighting, etc - it all has a very beneficial effect in terms of breeding soldier skills.
When I underwent an unarmed combat course in 3 PPCLI, I had not been in a knock-down/drag-out fight since elementary school. Yet here I was, 18 years into my career as an infantry officer - arguably the most "martial" of jobs on the market. It was a big-time eye-opener. I loved the sheer physical aspect of it, and I suspect that the Ptes enjoyed the heck out of the sanctioned opportunity to beat the snot ouf of their OC. Lord knows, the Pte that whacked me upside the noggin and put me on the mat certaiinly seemed to enjoy the opportuntiy to deliver repeated haymakers to my rather stunned (and ringing) head while I curled up like a whiny schoolgirl....
And that was the value of the experience. Getting your *** handed to you on a plate is eminently good for the soul. To coin a phrase, it builds character. Being knocked on your *** by a subordinate doesn't just teach humility (although it does that just fine) - it alse teaches you that when push comes to shove, rank hath no priviledge. If it gets down and dirty, you'd best be prepared to kick some arse. I absolutely loved it. No, I didn't like seeing stars and having my ears ring for the next 48 hours. But overall? Having that Pte kick my *** taught me some invaluable life lexsons. Not the least of which was "hit early and hit often".
All of that to say that there is a DEFINITE place in the Army's training curriculum for combatitives. Most people really don't want to fight "mano-a-mano" because they have never done so. Forcing soldiers to do pugilistic battle is a "good thing in my view. Engaging in personal combat and (if appropriate) getting your arse handed to you is a very valuable learning experience. As odd as it may sound, once you've done it, the next time is a "no brainer". In that regard, personal combatitives are very much like jumping out of an airplane.
I'll put it this way - I wouldn't want to have had my first real "knock-down/drag-out" fight in the real world. Far better to get that first ***-kicking out of the way under controlled circumstances with a (laughing) referee. You learn from such events, and I suspect that I am much better positioned to simply dive in with some nasty moves should the opportunity ever present itself in the real world. If nothing else, I learned that he who hesitates is eating floor.....
Beating the living piss out of each other (with appropriate protective gear) is excellent training. It still happens in the Canadian Army, and my ringing head is ample testament to that. It it isn't happening in your unit, then you need to ask why. Get a qualified instructor and have at it. Trust me - getting knocked on your arse every now and again is good for the soul....